Copper climbs

Copper rose nearly 3 percent on Monday, spurred by another fall in inventories and by a rally in stock markets. At 1401 GMT, copper for three-month delivery on the London Metal Exchange (LME) rose to $3,761 a tonne from $3,746 a tonne on Friday. Copper inventories fell 2,775 tonnes to 494,850, extending a recent falls. Cancelled warrants - material earmarked for delivery - stood at 26,750 tonnes, down from 29,825 on Friday.
"It appears that the Chinese are consuming copper...There does seem to be some demand thats soaking up the stocks," Marc Elliott, an analyst at Fairfax, said. "(But) Im still a bit cautious whether this is real and sustainable." Copper stocks have fallen more than 50,000 tonnes since late February. Traders and analysts said the momentum from falling inventories could be short lived as they believed most of the inflows to China had been stockpiled by the countrys state reserve body while prices are relatively low.
"(Sentiment is) mildly positive but with an underlying scepticism as to whether the inventory withdrawals will be sustained," analyst Kevin Norrish at Barclays said. Chinas imports of unwrought copper, including anode, refined metal and copper alloy, surged 79.3 percent on the year to 283,461 tonnes in February, bringing imports for the first two months to 485,283 tonnes, up 53.5 percent from a year earlier.
Chinas State Reserve Bureau has contracted as much as 80 percent of its 300,000 tonnes of planned copper purchases from the international market, industry sources have said. Metals prices are still sharply down from record highs reached six months ago, and several analysts were doubtful of a possible recovery in consumption any time soon.
Stocks of aluminium rose 5,350 tonnes to a record near 3.4 million tonnes. LME aluminium, used in transport and packaging, was at $1,345 a tonne from $1,347 a tonne. Aluminium and other industrial metals were unaffected by US industrial production output data, which fell to its lowest in nearly seven years. But manufacturing eased 0.7 percent in February after sliding 2.7 percent in January.
The pace of decline slowed thanks to an increase in the production of motor vehicle and parts after extended plant shutdowns in January. Among other base metals, Zinc was at $1,250.25 from $1,220 a tonne. Stocks of the metal, used to galvanise steel, fell 1,025 tonnes. Nickel jumped to $10,000 from $9,600, having hit an intra-day high of $10,095, its highest in more than two weeks, while lead was at $1,287 from $1,249 and tin was at $10,400 a tonne versus $10,475.